Samsung will launch its latest flagship smartphones – the Galaxy S7 and S7 Edge – later this week. The company is betting on the devices to regain share in the lucrative high end of the smartphone market, after about two years of sluggish sales. There appears to be a lot going in Samsung’s favor at this point. Both devices have seen overwhelmingly positive reviews from critics, who have praised the industrial design, camera and display quality. Moreover, Samsung’s key rival
Apple has also been seeing some weakness of late, with iPhone sales projected to fall for the first time during the first quarter of 2016 amid relatively weak uptake for the 6S series.

We are modelling S7 shipments of about 40 million units for 2016, with an ASP of $550. However, if the device is very well received by customers, enabling shipments to rise to 60 million units, there could be a an upside of about 10% to Samsung’s enterprise value, per our estimates. Below, we detail our base-case and upside assumptions for Samsung’s S7 sales and its impact on the company’s valuation.